IZA DP No. 3131: The Impact of Welfare Reform on Leaver Characteristics, Employment and Recidivism: An Analysis of Maryland and Missouri
State and federal reforms of the 1990s transformed the U.S. cash assistance program for single parents and their children. Despite an extensive literature examining these changes and their impacts, there have been few studies that consider the effects of these reforms from the perspective of the recent period. The analysis here focuses on the characteristics and employment of welfare recipients in Maryland and Missouri, 1991-2004. We find that there has been only modest change in the observable characteristics of those entering, remaining on or leaving welfare, but the importance of employment has grown for each of these groups. We also examine the dynamics of employment and welfare recidivism, comparing cohorts of leavers prior to and after welfare reform. We find that after welfare reform leavers are much more likely to be working. Although in Maryland those working have earnings that are somewhat below employed leavers prior to reform, in Missouri earnings for employed leavers are unchanged. In both states, the types of jobs leavers hold have not changed substantially, and leavers are less likely to return to welfare following reform.